@Katie1688 Message the guest and say that, with their permission, you will ask Airbnb to cancel the reservation with no penalty to either party. Then, when they agree, ask Airbnb to cancel (stressing penalty free) and refer them to the message stream with the guest.
You need to be real careful with cancelations on your part even if it something beyond your control as I just recently found out. You will need to thoroughly document the cancelation and be sure to dot your i's and cross your t's. Stressing penalty free is the catch as you as an Airbnb host seem to get penalized right off the bat and you have to prove why the cancelation and show documentation. Sort of like guilty until proven innocent.